The report highlights the overall industry potential and captures the changing dynamics of the food tech industry in India. It will suffice in providing the intending clients with cutting-edge market intelligence and help them in taking sound investment decisions. Besides, the report also identifies and analyses the emerging trends along with essential drivers and key challenges faced by the industry.
The Indian food tech industry is one of the most vibrant sector which has witnessed an unprecedented growth over 2013-2018, primarily driven by the surging demand from a bulging population and burgeoning middle income bracket supported by a flourishing economy.
From a stark decline in 2015 to a quick turnaround by 2017, the Indian food tech industry has registered a drastic resurgence against the market looms, emerging as the fastest growing internet industry in India. Digital literacy and rapid penetration of smart devices has fuelled the adoption of mobile and web based services, benefiting the food tech industry.
The middle class retreat in Indian metro cities are increasingly trading up to explore the order-in culture, driving the volume sales for food tech players. Growth in online, mobile and Delivery channel has been the key trends bolstering the growth trajectory for Indian food tech players.
“According to a Bloomberg report, more than 400 food delivery apps were operational in India between 2013 and 2016. The online food delivery industry grew by 150% year-on-year, with an estimated Gross Merchandise Value (GMV) of $300 Mn in 2016“.
A burgeoning population of young and working population who are time pressed for at-home cooking are increasingly turning to online food delivery and quick service restaurants. Rapid rural-urban shift, rising number of women in workforce and a buoying middle income bracket with a sound disposable income are the key drivers of food tech industry growth over the review period 2012-2017. A healthy internet penetration and universal adoption of smart devices are aiding in the development of the ecosystem, but the challenge of digital affinity remains blurred as the usage of technology as a communication medium largely remains limited to younger tech savvy consumers.
The food tech market in India is gaining momentum in the wake of a growing tech savvy consumer base receptive to online food orders and is expected to grow at a CAGR of over 12% during the period 2017 – 2022.
In terms of overall value share restaurant based food tech companies are outpacing the aggregators owing to their already existing brick and mortar outlets’ consumer base and wider geographical presence. However, in terms of volume growth, food aggregators (including food delivery services) segment is poised to register a strong growth over 2017-2022. Food aggregators continued to enjoy mass popularity and rapid consumer acquisition due to their convenience of ordering from multiple outlets and wider variants availability.
Indian food tech industry is in the budding stage and the market is expected to continue consolidation with the entry of new niche players and growing investments from the global tech giants and local industry moguls.
The predominant hurdle in the growth of the food tech industry still remains with the regulatory bottlenecks which are prerequisites to achieve desired growth. The current food tech business regulatory framework mandates new businesses to obtain around thirty permits to become operational, a huge hurdle in ease of doing business. This calls for policy reforms and a refurbishment of the business scenario to attract new and existing players explore the market potential, providing fresh impetus to India’s food tech growth story.
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